Why does the paint market show two kinds of differentiation

From the 1990s of the last century when private paint companies rose, the coatings industry experienced more than 20 years of “real development.” After several reshufflings, at the enterprise level, it has changed from the development model of the first small-hand workshops to the current foreign investment. The stage of the brand competition.

Today, the entire paint market in China has entered a white-hot competition as a whole, and the entire industry is flooded with products of many brands. As the industry continues to mature, special “three and a half” paint ecosystems have formed in some parts of China. The "one" refers to the Pearl River Delta, the Yangtze River Delta, and the Bohai Rim region, all of which are well known to everyone. The remaining "half" is generally considered to be the Sichuan basin centered on Chengdu. The reason why it is only "half" is because it is still in its development stage and it has not been fully formed. This "three and a half" ecosystem has bred most of the nation's famous paint companies.

Although after more than 20 years of rapid development, it is still hard to say that it is an orderly development track for the Chinese coatings market. We have seen that despite the fact that the paint market is moving in the direction of normalization, many new problems and new challenges have been encountered. This has caused dealers to become confused from time to time. For example, the current industry is facing a transition period, and some dealers in the paint business have also felt the “labor pains” of the transition. This leads to "business difficult to do" as the mantra of many dealers.

(I) Standardization of Building Materials Market

In recent years, the rapid development of real estate has brought tremendous business opportunities to many industries including the decoration and building materials industries. This "fire" of burning real estate has also greatly stimulated the development of the paint market.

With the development of the paint industry, the chaotic mode of the building materials market has been unable to keep up with the pace of the times, and it has been difficult to attract even larger orders, which has no benefit to the brands of companies and distributors. This situation indirectly promoted the building materials market to become standardized. With the development of real estate from the central city to the second-tier and third-tier cities and even the urban market, local governments have unified management of the building materials market. Many places have built, high-grade, and honest decoration materials shopping areas.

Various construction groups build large-scale building materials stores across the country. The most prominent ones are: Beijing Global Red Star Macalline (has built more than 130 stores in more than 90 cities across the country), Beijing Holly House (has built stores in nearly 90 cities across the country), Hong Kong Howard Group (More than 20 cities across the country, 28 comprehensive plazas were built), glorious big markets built by Beijing Demei Aoxiang and Anhui Nanxiang (built 19 markets nationwide), Wuxi Wuzhou Group in the country 18 The city has built 31 stores, Hebei Dongming Home Chain Store, Qingdao Home Furniture Plaza, Weihai Lotte Home, and Changchun Eurasia Marketplace.

These large-scale building materials stores appear with a high-end image, which is very helpful for branding; but for paint brands, some high-end stores are difficult to enter, even if they enter the sales situation is not good. Therefore, Global Coatings Network believes that for distributors it is a bit like a chicken rib, it is a pity that food is tasteless. This has determined that more dealers are more willing to return to the ordinary building materials market and start local brands through their own image standards in order to attract business.

(II) Flattening of corporate channels

According to Jiuzheng Building Materials Network, many paint companies can be said to have begun to take shape in terms of channel flatness. Especially in Hunan, Jiangsu, Zhejiang, Jiangxi, Hubei and other provinces, the coverage of flattened outlets of enterprises reaches 50%-60%; in addition to the northeast, northwest, and southwest regions, due to lagging economic development, transportation, etc. For reasons such as underdeveloped infrastructure, the flat layout of the company has just started or spread slowly.

Why do companies want to have a flat channel?

First, the channels sink vertically and save management costs. This faster logistics delivery method eliminates the hassle of transit and allows products to go directly to the hands of third- and fourth-tier agents. It not only reduces the circulation of products, but also saves the company's management costs.

Second, expand channel capacity and achieve quantitative development. The county-level market agents who visited many places learned that the top five distributors in the market have reached 500,000 to 1000,000; general county paint sales value reached 10 million yuan, and some major counties and strong counties even exceeded 30 million yuan, to provide the largest possible channel layout.

Third, break the traditional channel model and maximize the benefits. Through the flattening of channels, more talents have emerged from the agents. They are no longer limited by provincial and secondary general agents. They can have more room to exert their advantages and can turn products into products in a short period of time. Strong local brand. For businesses, this is a very good thing.